Like most major pharma companies, Novartis has been looking to emerging markets to help shore up the revenue gap created by patent expirations. China, India, and other emerging economies represent not just a source of cheaper R&D and manufacturing, but millions of new--and newly affluent--customers. The theory is that the rising middle class and new government assistance programs in these nations will be enough to bolster sales while new pipeline products advance.

And it's certainly true that these markets are growing quickly and buying more drugs. But they are buying them from local generic manufacturers, not Western pharma companies. Despite some rosy predictions, Pfizer recently scaled back its growth projections in emerging markets while Eli Lilly has actually seen year-over-year declines. Ernst & Young estimates that the gap between the growth pharma had been hoping for and the likely reality is a whopping $47 billion.

Against that backdrop, Novartis has been trying to get a new patent in India on its cancer drug Glivec (sold as Gleevec in the U.S.). A new formulation could give the company another two decades of exclusivity and help along some of its own emerging economy growth projections. But India doesn't regard the new formulation as sufficiently innovative to warrant a new patent--thus the court appeal.

While the case has only recently begun and is expected to run at least a couple of months, the early rounds don't look encouraging for Novartis. India's Supreme Court justices directly asked Novartis to lower the price of Glivec, calling the current price tag "shocking." Also this month, a lower Indian court ruled that local generic manufacturer Cipla did not infringe any Roche patent in making a knock-off of the cancer drug Tarceva (see Legal Briefs). This isn't the playing field drug companies are used to, and it makes those huge emerging economy populations a lot harder to reach.

Things aren't going all that well closer to home on the patent front, either, as more and more people become fed up with the current state of the system.

There's little doubt that patents are increasingly being used and abused in ways never contemplated or intended by the founders. The skirmishes between Apple, Google, and Samsung are ample evidence of a system run amok. Companies are given patents for ideas rather than inventions, or for incremental solutions that are, well, patently obvious. They try to proliferate as many as possible in order to block their competitors, create a defense, or act as a gatekeeper. It's a huge waste of resources, it has clogged the courts--particular the Federal Circuit, which hears all patent appeals--and it's ultimately not good for consumers.

And yet in the growing rumbles about patent abuses, there could be some good news for pharma.

Earlier this year, the Wall Street Journal published a journalistic debate on whether patent periods ought to be extended specifically for pharmaceuticals. Arguing in favor, Josh Bloom of the American Council on Science and Health suggested that patent durations be stretched five years for novel and innovative medicines, and somewhat less for mere "line extensions."

It's certainly an argument that is welcome among pharma execs, but one likely to be viewed as nakedly self-serving among many outside observers. Yet this idea of making special allowances for the pharma industry got more support recently from Judge Richard Posner of the 7th Circuit Court of Appeals.

Posner, who recently threw out an entire patent lawsuit involving Apple and Motorola, is among those fed up with the current system. He called patent litigants "animals [that] will use all the means at their disposal, all their teeth and claws that are permitted by the ecosystem." He went on to question the need for patents in "most industries." He expanded on that idea in an article for The Atlantic published earlier this summer:

"With some exceptions, U.S. patent law does not discriminate among types of inventions or particular industries. This is, or should be, the most controversial feature of that law. The reason is that the need for patent protection in order to provide incentives for innovation varies greatly across industries."

Posner calls out the pharmaceutical industry specifically, calling it "the poster child for the patent system." Admittedly, his solution is to decrease patent duration for industries like software where the cost of innovation is lower, rather than extend it for high-cost industries. But the idea of adapting patent law to specific industries is gaining momentum, and it's something pharma lobbyists must be salivating over.

For now, of course, drug companies don't have much choice but to use--and sometimes abuse--the system as it is. That means trying to win franchise extensions with patents that aren't much more legitimate than, say, one-click online ordering. That strategy doesn't always work here, and it looks even less likely to work in the emerging economies companies are counting on for growth.

The only other alternative is to get more productive with R&D and get drugs on the market with more than a few years exclusivity left. As far as that goes...well, we're working on it.